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2025 (10) TMI 1256
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....nirudh Krishnan Adarsh Subramanian Anuraag Rajagopalan S.Nivethithaa Counsel for Respondent 3, S. Eshwar M/s Aanchal M Nichani Counsel for Respondent 4, S.S Rajesh Counsel for Respondent 5 COMMON ORDER These petitions have been filed by the respective petitioners seeking for enforcement of the foreign arbitral award dated 05.07.2024 passed in their favour against the respondents 2 & 3. 2. The first respondent/Financial Software and Systems (FSS) is a digital payment services company and it has two principal business divisions, namely, CashTech and PayTech. The respondents 2, 3 and 4 are the founders of the Company. The company carries on business of providing online, real time, electronic transaction processing and payment systems including Automated Teller Machines (ATMs), Point of Sale terminals (PoS), ATM sharing between banks, international and domestic interchanges such as MasterCard, Visa and others. The company also provides payment gateway and other value added service, such as, mobile top-up, etc. 3. The second respondent is an individual residing in India and a promoter and the Managing Director of the first respondent company. The third respondent is the wife....
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....mplement a Strategic Sale. 6. The respective petitioners seek two substantive claims; first, they seek damages for breach of Clause 19.1 of the SASHA; and the second, they claim for specific performance of Clause 19.6 of the SASHA. They state that Clause 19.1 imposes an absolute obligation on the respondents 2 and 3 to procure a secondary sale, however, the respondents 2 and 3 breached the absolute obligation as the secondary sale did not happen. On this basis, the respective petitioners claim damages to be quantified in a sum equivalent to the exit price. In respect of specific performance, they assert that their rights under Clause 19.6 of the SASHA to implement a strategic sale pursuant to Clause 19.6(b)(ii) of the SASHA owing to alleged material breaches of the SASHA. 7. Before the arbitration, which culminated in passing of the award in favour of the respective petitioners, the contentions of the respective petitioners were as follows: a) Despite numerous efforts over several years (including secondary sale attempt), the Company and the promoters failed to provide an exit to the investors; b) Scope of obligations under clause 19.1 of the SASHA: It impos....
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.... (i) Termination of rights under clause 24.6 (c) of the SASHA; and (ii) Strategic sale under clause 24.6 (a) of the SASHA. 10. The respective petitioners (Investors) have filed these petitions seeking for enforcement of the foreign arbitral award dated 05.07.2024 before this Court in terms of Sections 47 to 49 of the Arbitration and Conciliation Act, 1996 (in short "the Act") and have prayed for conversion of the foreign arbitral award dated 05.07.2024 into a decree as per Section 49 of the Act to enable them to execute the foreign arbitral award dated 05.07.2024. 11. The following objections have been raised by the second and third respondents, which they claim, will fall under Section 48 of the Act for challenging the enforcement of the foreign arbitral award dated 05.07.2024; a) The award is vitiated by fraud and it has been passed in violation of public policy of India; b) The award, is in violation of the public policy of India; i. since it fails to consider the second and third respondents' submission of buy back; ii. as it has Granted reliefs, which contravenes the Indian Companies Act; c) The arbitral Tribunal....
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....term capital is permitted only with the approval of the National Company Law Tribunal and after notice to creditors and regulators; b) There is an embargo on the Companies from purchasing its own share except as provided under the Indian Companies Act, 2013; c) Section 68 of the Indian Companies Act, 2013 allows buy-back of shares by the Company subject to strict limits - Maximum 25% of paid up capital and free reserves, use of approved sources, solvency declaration and compliance with debt -equity ratio; d) Bars buy back if the Company has defaulted on certain obligations or non compliance with the accounting standards. 14. Mr.Anirudh Krishnan, learned counsel, after referring to clause 19 of SASHA would submit that it requires both the Company and Promoters to make best efforts to secure an exit for the investors. He would submit that clause 19.1 of SASHA provides a mechanism for the secondary sale of the investors' shares at the exit price and clause 19.2 of SASHA provides for buy back mechanism. But, it is explicitly "subject to applicable law". 15. Mr.Anirudh Krishnan, learned counsel, would rely upon the following decisions in support of t....
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....art of Singapore's public policy. 21. Mr.Anirudh Krishnan, learned counsel would therefore submit that, the Singapore Courts' finding rendered in the case of challenging arbitral award has no bearing for the objections raised by the respondents in these petitions as those objections will have to be tested independently by this Court as it involves violation of the fundamental policy of the Indian Law and not Singapore Law. He would submit that this Court will have to test the award from the lens of Indian public policy, which, according to him, is beyond the limit of Singapore Courts. 22. Mr.Anirudh Krishnan, learned counsel would further submit that the failure to consider the material issue by the arbitral Tribunal amounts to violation of the most basic notions of justice and morality. He would submit that the Arbitral Tribunal, having failed to consider the material issue viz., "Whether the putative award of damages against the surrender of shares is a buy back or not", the Singapore High Court has, however, erroneously held in its decision rendered in the challenge made by the respondents to the arbitral award that the aforesaid issue was impliedly considered by t....
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....ld submit that the investors invoked termination and acted upon it, while also seeking for strategic sale. Having derived the benefit of termination, the investors are estopped from being granted the right of strategic sale. According to him, the respondents 2 and 3 were denied an opportunity to argue the doctrine of election and display on facts as how the investors had in fact elected termination of rights and not strategic sale. According to him, the Arbitral Tribunal gave a finding on election by itself without any submission in relation thereof by the investors. 25. Mr.Anirudh Krishnan, learned counsel, would further submit that Section 16(b) of the Specific Relief Act mandates that a party who has breached an essential term of the contract, cannot obtain specific performance. According to him, notwithstanding the breach committed by the investors, who had invoked termination of rights (example, excluding respondents from management and board participation), the Arbitral Tribunal allowed the investors to pursue specific performance in the form of strategic sale, in direct contravention of Section 16(b) of the Specific Relief Act. Section 16(b) of the Specific Relief Act mak....
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....A's founder-partner Mr.G.Sekar's son is married to the daughter of Mr.Sivakumar.G, who was the Head of Finance for the first respondent - Company till February, 2022, M/s.G.Sekar Associates (GSA) was appointed as the statutory auditor. Therefore, the exit price determined by the Arbitral Tribunal cannot be a true assessment, which does not suffer from any bias. 30. Learned counsel appearing for the second respondent would also submit that the request made by the respondents 2 & 3 for change of statutory auditor was also not acceded to by the first respondent. 31. Learned counsel appearing for the second respondent would also submit that owing to the first respondent as well as the respective petitioners not providing with E&Y report to the respondents 2 & 3, an oppression and mismanagement petition came to be filed before the National Company Law Tribunal requesting inter alia an interim relief seeking a direction for handing over a copy of the E&Y report to the respondents 2 & 3. The appointment of the M/s.G.Sekar Associates (GSA) was also challenged before the National Company Law Tribunal. Learned counsel appearing for the second respondent would submit that the pr....
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....t for the proceedings before the enforcement court. He would submit that fraud is a public policy ground under Section 48 of the Act. From various decisions rendered by the constitutional courts, he would submit that the failure to raise the ground of fraud before the arbitral proceedings as well as before the Singapore High Court will not in any manner affect the rights of the parties to raise such a ground before the enforcement court. 36. Learned counsel appearing for the second respondent would submit that only based on bald statements, the exit price has been determined by the Arbitral Tribunal, which is in the form of damages. 37. On the other hand, Mr.Vijay Narayanan, learned Senior Counsel, appearing for the petitioner in Arb.O.P.(Com.Div) No.285 of 2024, would submit as follows: (a) The grounds available under Section 48 of the Act, are watertight. He would submit that no ground outside Section 48 of the Act, can be looked into. (b) The enforcement Court cannot re-appreciate and re-examine the merits of the foreign arbitral award and it cannot have a second look at the foreign arbitral award under Section 48 of the Act, by rendering a different cont....
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....e foreign arbitral award is also not in conflict with the most basic notions of morality. 38.In support of his contentions, Mr.Vijay Narayanan, learned Senior Counsel appearing for the petitioner in Arb.O.P.(Com.Div) No.285 of 2024, relied upon the following authorities: (i) Vijay Karia vs. Prysmian Cavi E Sistemi SRL, reported in (2020) 11 SCC 1. (ii) Cruz City 1 Mauritius Holdings v. Unitech Limited, reported in 2017 SCC OnLine Del 7810. (iii) Government of India vs. Vedanta Ltd., reported in (2020) 10 SCC 1. (iv) Shri Lal Mahal Ltd. vs. Progetto Grano Spa, reported in (2014) 2 SCC 433. (v) Gemini Bay Transcription (P) Limited. vs. Integrated Sales Service Ltd., reported in (2022) 1 SCC 753. (vi) Avitel Post. vs. HSBC PI, reported in (2024) 7 SCC 197. (vii) EIG vs. Mcnally, reported in 2021 SCC OnLine Cal 2915. (viii) Mercator Ltd. vs. Dredging Corporation of India Ltd., reported in 2024 SCC OnLine Del 3075. (ix) Banyan Tree Growth Capital LLC vs. Axiom Cordages Limited and others, reported in 2020 SCC OnLine Bom 781. (x) Nine Rivers Capital Limited vs. Gokul Patnaik and another, reported....
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....ale, in the event damages are not paid, which, in any event, has not been paid within the date prescribed in the award. (d) To fall within the purview of Section 48(2)(b)(ii) of the act, the foreign arbitral award must contravene a fundamental and non-derogable principle or core value for the enforcement to be refused. (e) The contention of the respondents 2 & 3 that reading Clause 19.1 of SASHA is an absolute obligation would cause a prohibited buyback has been raised only at a belated stage i.e., in their post-hearing reply submissions dated 09.02.2024 before the Arbitral Tribunal. Therefore, the said contention demonstrates that the issue was neither a foundational plea nor a live controversy throughout the arbitration, but rather an afterthought urged at the fag end of the proceedings. (f) The Singapore High Court considered the buyback issue in detail and identified the following two limbs of the respondents 2 & 3's case: (i) Construing Clause 19.1 of SASHA was absolute as impermissible, because it contradicted Clause 19.2 of SASHA and effectively imposed a buyback obligation, and (ii) Such interpretation would be unenforceable ....
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....nd reappreciating evidence is not permissible under Section 48 of the Act. (m) The Arbitral Tribunal has rightly rejected the split sale plea by holding that the notice of 18th September, 2020 was validly invoked as Clause 19.1 and that no waiver could be inferred in light of Clause 29.5 of SASHA, which forecloses implied waiver without written consent. The Singapore High Court rejected the argument that the Tribunal failed to consider the waiver defence. The Court held that an Arbitral Tribunal is not obliged to expressly address every argument; an issue may be resolved implicitly through factual findings. (n) Respondents 2 & 3's reliance on Sections 10(b) and 14(1)(a) of the pre-2018 Specific Relief Act to argue that specific performance is barred when damages are adequate, is misplaced. The 2018 amendments, which removed this bar, apply retrospectively. Consequently, Section 14(1)(a) no longer bars specific performance where damages may be adequate. Instead, specific performance is now the rule, and damages are available only in addition, under Section 21 of the Specific Relief Act. (o) The respondents 2 & 3 admit to having knowledge of the existen....
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....i materia, it was always open to the respondents 2 & 3 to have raised additional grounds before the Singapore High Court. However, they did not raise such grounds, despite having the full opportunity and evidently did not consider these grounds adequate for a challenge before the seat court. They also chose not to appeal the decision of the Singapore High Court, dated 21.02.2025, before the court of Appeal in Singapore. (e) Section 24(a) of the Singapore International Arbitration Act enables a party to challenge the award, on the ground of fraud. But, despite the same, the respondents 2 & 3 failed to raise the ground of fraud before the Singapore High Court, while challenging the arbitral award. Therefore, no special circumstance has been made out by the respondents 2 & 3 to raise the ground of fraud for the first time before this Court under Section 48 of the Act. (f) The grounds raised by the respondents 2 & 3 resisting enforcement of foreign arbitral award were either raised or could have been raised before the Singapore High Court, but were consciously omitted from the scope of challenge to the final arbitral award. It is settled law that rejection of the mate....
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....uments which have been dismissed by the NCLT after considering all allegations raised by the respondents 2 & 3 and Mr.Archit Mylandla in the NCLT proceedings and had passed a well-reasoned order dated 28.11.2023 allowing the appointment of G.Sekar Associates and therefore, their arguments are meritless and irrelevant to the present proceedings. (d) It is pertinent to note that no allegation in the common counter states that the appointment of G.Sekar Associates is illegal. The respondents 2 & 3 have also suppressed the fact that they did not appeal against the said order dated 28.11.2023 of NCLT before NCLAT), but are raising untenable allegations before this Court. (e) The allegations relating to the signing of financial statements of the first respondent by one director for the financial years 2022-2023 and 2023-2024 are sub-judice before the NCLT. (f) Section 134 of the Companies Act, 2013 (of which the respondents 2 & 3 are alleging violation), governing signing of financial statements, is procedural and not substantive in nature. Hence, the allegations on manner of signing of financial statements are meritless and irrelevant to the present proceeding....
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....ns of the company upon receipt of the notice of material breach of the SASHA by the petitioners in Arb.O.P.(Com.Div) No.453 of 2024. Hence, it is the second respondent, who jumped ship and abandoned the company of the fourth respondent, who was left to manage the company along with certain other company personnels during the volatile, turbulent and uncertain period. (c) The arbitral award has recorded the contentions of the fourth respondent denying any breach of the SASHA. This will clearly reveal that the fourth respondent has not colluded with the petitioners. (d) The arbitrator has given reasons as to why the petitioners have not claimed damages against the fourth respondent and therefore, the very same objections cannot be raised by the respondents 2 & 3 through this petition filed under Section 48 of the Act, as this Court is only an enforcement court. (e) The frail connection drawn between the increase in salary/bonus payouts to the fourth respondent owing to the alleged quid pro quo between the petitioners and the fourth respondent is imaginative and false. The said payouts/increase in salary is very much in line with the salary, the second respon....
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.... sale and the respondents are not to interfere with the strategic sale (under Clauses 19.6(b) and 24.6(a) of the SASHA) to be implemented by the petitioners. (d) The respondents are to render full cooperation with respect to any strategic sale (under Clause 19.6(b) of the SASHA) to be implemented by the petitioners. (e) The respondents 2 to 5 are to sell their shares pursuant to a strategic sale as implemented by the petitioners (under Clause 19.6(b) of the SASHA) and to distribute the proceeds in accordance with Annexure 12 of SASHA within a period of six months from the date of the arbitral award. (f) Simple interest at the rate of 5.33 from 01.07.2021 until the date of the arbitral award on the sums awarded in paragraph No.804(a) of the arbitral award. (g) Post-award interest at the simple interest at the rate of 5.33% from the date of the arbitral award until the date of full repayment on the sums awarded in paragraph Nos.804(a) and 804(f) of the arbitral award. 47. The objections raised by the second and third respondents for enforcement of the foreign arbitral award passed in favour of the respective petitioners have been raised under Se....
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....njurious or harmful to the public good or the public interest has varied from time to time." Thus, public policy is either subject to a narrow view i.e., fixed principles, where Courts cannot create new heads of public policy or a broad view; where Courts can play a role in Judicial law making. 54. Foreign awards operate at the level of Private International Law involving conflict of laws as opposed to domestic awards. Thus, a distinction needs to be drawn while applying the rule of public policy between a matter governed by domestic law and a matter involving conflict of laws. The application of the doctrine of public policy in the field of conflict of laws is more limited than that in the domestic law and the Courts are slower to invoke public policy in cases involving a foreign element than, when a purely municipal legal issue is involved. Although the concept of public policy is the same in nature in these two spheres of law, its application differs in degree and occasion, corresponding to the fact that the transactions containing a foreign element may constitute a less serious threat to municipal institutions than a purely local transaction. 55. The particular rule of pu....
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....pplying the said criteria, it was held that the enforcement of a foreign award would be refused on the ground that it is contrary to the public policy of India, if such enforcement would be contrary to (a) Fundamental policy of Indian law; or (b) The interests of India; or (iii) Justice or morality. 59. In relation to the 'Fundamental Policy of Indian law', the Hon'ble Supreme Court held that, (a) the award must invoke something more than merely a violation of Indian law to be refused enforcement; (b) a violation of economic interests of India is contrary to public policy; (c) the orders of Courts must comply with the fundamental principles of law and a disregard for such orders would be contrary to public policy. 60. Subsequent to the Judgment in Renusagar's case, referred to supra, the Hon'ble Supreme Court interpreted the meaning of 'public policy'. In the case of ONGC Ltd. v. Saw Pipes Ltd. reported in (2003) 5 SCC 705 (now overruled), the Hon'ble Supreme Court held that in addition to the meaning of public policy, provided in Renusagar's case (which was in relation to foreign awards), the Hon&#....
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....39;s case. Additionally, it recommended, "(a) addition of Section 34(2A) to the Arbitration and Conciliation Act, 1996, in order to limit the ground of 'patent illegality' to purely domestic arbitral awards; and (b) a suggestion to add that "an award shall not be set aside merely on the ground of erroneous application of the law or by re-appreciating evidence". 64. The 246th Law Commission Report also proposed to statutorily include a definition of public policy based on the Honourable Supreme Court's dicta in Renusagar's case. Going a step forward, the 246th Law Commission Report suggested that the definition of public policy should not include within it 'the interests of India' since the same was capable of interpretational misuse. Thus, it was proposed that the ambit of public policy for enforcement of foreign award should be limited to fundamental policy of Indian law; or basic notions of justice or morality. 65. Before the recommendations of the 246th Law Commission Report were incorporated into the Arbitration and Conciliation Act, the Honourable Supreme Court expanded the scope of public policy in ONGC v. Western Geco International Ltd. reported i....
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.... (c) Ignores vital evidence in arriving at its decision.; (b) Contrary to the interest of India: This ground relates to India as a member of the world community in its relations with foreign powers; (c) Against justice: An award is against Justice, when it shocks the conscience of the Court. For example, an arbitral award, which awards a relief without any reason or justification; (d) Against morality: Morality includes within it 'sexual morality' so far as Section 23 of the Indian Contract Act, 1872 is concerned. If it is to go beyond sexual morality, it would cover agreements, which are not illegal per se but would not be enforced given the prevailing morals of the day. Interference, on this ground, would also be only if it is something, which shocks the Court's conscience; (e) Patent illegality: This includes contravention of the substantive law of India, which would result in an illegality, which goes to the root of the matter and cannot be of a trivial nature; contravention of the Arbitration and Conciliation Act itself; contravention of Section 28(3) of the Arbitration and Conciliation Act, which is the 'Rules applicable to the substance o....
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....r the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute." 69. In the case of Ssangyong Engineering and Construction Company Ltd. v. NHAI ("Ssangyong Engineering") reported in 2019 (15) SCC 131, the Honourable Supreme Court set aside a majority domestic award. The specific factual circumstance involved a Circular being issued by the Respondent and unilaterally applied as binding on the other party. This was upheld by the majority arbitral tribunal. The Honourable Supreme Court held that "This being the case, it is clear that the majority award has created a new contract for the parties by applying the said unilateral circular and by substituting a workable formula under the agreement by another formula dehors the agreement. This being the case, a fundamental principle of Justice has been breached, viz., that an unilateral addition or alteration of a contract can never be foisted upon an unwilling party, nor can a party to the agreement be liable to perform a bargain not entered into with the other party. Clearly, such a course of conduct would be contrary to fundamen....
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.... for a violation, which is beyond mere statutory violation. In Renusagar's case (cited supra), the Court held that Article V(2)(b) of the New York Convention, which is pari materia to Section 48(2)(b) of the Act, had omitted the reference to "principles of law of the Country in which it is sought to be relied upon". While replacing the Geneva Convention of 1927, since the expression "public policy" covers the field not covered by the words "and the law of India", which followed the said expression, it was held that contravention of law alone will not attract the bar of public policy and something more than contravention of law is required. 74. It is important to assess the nature, object and scheme of a statute to determine, if the violation of such statute would constitute a violation of the fundamental policy of Indian law. In Vijay Karia's case(cited supra), the Honourable Supreme Court held that any rectifiable breach under the FEMA cannot be said to be in violation of the fundamental policy of Indian law. It held that the Reserve Bank of India could step in and direct the parties to comply with the provisions of the FEMA or even condone the breach. However, the arbi....
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....Act permits a party to resist enforcement on grounds relating to violation of natural justice, if a party is unable to present its case during the arbitration proceedings. However, a party may also resist the enforcement of an arbitral award on the ground of natural justice as being against public policy under Section 48(2)(b)(ii) of the Act. A foreign award can possibly be challenged, if the arbitral Tribunal had ignored the submissions of the party in totality and the resulting award was contrary to the principles of natural justice, thereby violating public policy. This was the finding of the Delhi High Court in the case of Campos Brothers Farms v. Matru Bhumi Supply Claim Pvt. Ltd. reported in (2019) 261 DLT 201. An appeal against the Single Judge's order in this case is currently pending before the Division Bench of the Delhi High Court. 79. Under Section 48(2) of the Act, a Court is not permitted to delve into merits of the award and evaluate the manner in which the arbitral Tribunal has construed the terms of the underlying contract. However, recently, in a rare decision, the Honourable Supreme Court has declined the enforcement of a foreign arbitral award in the case of ....
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....rd or a domestic award tendered in an international commercial arbitration, as opposed to a domestic award. As stated in the case of Fritz Scherk v. Alberto Cuvler, 417 US 506 (1974), we cannot have trade and commerce in world markets and international seas exclusively on our terms, governed by our laws and resolved in our Courts. Concerns of international comity, respect for the capacities of foreign and transnational Tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce the parties' agreement even assuming that a contrary result would be forthcoming in a domestic context. 82. As the Delhi High Court in Cruz City case (cited supra) has aptly stated, a policy to enforce foreign awards itself forms a part of the public policy of India - and Courts should strive to find the right balance between the policy of enforcing foreign awards and considering the grounds for resisting the enforcement of foreign awards. In the light of judicial guidance and international circumspection over public policy as a ground for refusal of enforcement of foreign awards, it is clear that "public policy....
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.... (c) Grounds, which go to the public policy of India. 87. The Honourable Supreme Court held that Courts could not have any discretion, if grounds affecting jurisdiction of arbitral proceedings are made out, as this would make the award a nullity. Similarly, Courts could not have discretion in cases, where grounds affecting the public policy of India were made out. However, in terms of grounds affecting party interest alone, the Honourable Supreme Court held that Courts did have discretion to enforce such awards even if such grounds are made out. In essence, the Court held that the word 'may' in Section 48 would be considered to mean 'shall' depending on the context set out above. 88. The Honourable Supreme Court further pointed out the proenforcement 'bias' permeating through Section 48 and observed that Section 48(1)(b) of the Act must be strictly construed. Thus, the Honourable Supreme Court held that the expression 'unable to present his case' would be 'a facet of natural justice, which would be breached only if a fair hearing was not given by the arbitrator to the parties'. Thus, read along with the first part of Section 48(1)(b) of the Act - a party not being given prop....
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....mental policy of Indian law could only mean fundamental and substantive legislative policy, which forms the bedrock of Indian laws and not a mere provision of any enactment. The Honourable Supreme Court in Vijay Karia's case approved the Delhi High Court's reasoning and its observations in Cruz City Judgment. 92. In Vijay Karia's case, the Honourable Supreme Court had also severely castigated the appellants for attempting to argue the matter as a first appeal, given the limited jurisdiction that the Honourable Supreme Court had and in such circumstances, the Honourable Supreme Court had imposed costs of Rs. 50,00,000/- on the appellants, to be paid to the respondents. 93. In Government of India Vs. Vedanta Ltd. reported in 2020 (10) SCC (1), the Honourable Supreme Court held that enforcement Court cannot reassess the arbitrator's appreciation of evidence or interpretation of contractual clauses under Section 48 of the Act. The Honourable Supreme Court clarified that mere disagreement with the arbitrator's interpretation does not fall within any of the narrowly defined grounds on which enforcement could be refused. This decision was also followed by the Hon....
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....he Division Bench of the Delhi High Court has held that to countenance an allegation of fraud for the purpose of resisting enforcement, there should be substantial evidence, which should be tested on the basis of admitted documents. 97. As a sequitur to the decisions rendered by the Constitutional Courts with regard to enforcement of foreign arbitral awards and the objections that can be raised under Section 48 of the Act, the following principles emerge: i) The Honourable Supreme Court favoured a narrow, non-evolving view of public policy. ii) Public policy connotes some matter, which concerns the public good and public interest. iii) Foreign awards operate at the level of private international law involving conflict of laws, as opposed to domestic awards. The application of the doctrine of public policy in the field of conflict of laws is more limited than that in the domestic law and the Courts have to be slow to invoke public policy in cases involving a foreign element than when a purely municipal legal issue is involved. iv) The principle of minimal judicial intervention in enforcement of foreign awards as distinguished from domestic awar....
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....e contract itself is void, then enforcement of foreign award passed arising out of the void contract may be refused. (xiv) It is the sovereign commitment of India to honour foreign awards, except on the exhaustive grounds provided under Article V of the New York Convention. It is essential to recognize the need for restraint in examining the correctness of a foreign award or a domestic award tendered in an international commercial arbitration, as opposed to a domestic award. (xv) The enforcement Court cannot re-assess the arbitrator's appreciation of evidence or interpretation of contractual clauses. Mere disagreement with the arbitrator's interpretation does not fall within any of the narrowly defined grounds on which enforcement could be refused. (xvi) The challenge procedure in the primary jurisdiction gives more leeway to Courts to interfere with an award than the narrow restrictive grounds contained in Section 48 of the Act when a foreign award enforcement is resisted. (xvii) A party is not permitted to impeach the merits of the award before the enforcing Court. (xviii) Parties ought not to re-litigate issues, which have bee....
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.... are as follows: (a) Buyback of shares by the first respondent as directed under the foreign arbitral award violates Sections 66 to 69 of the Indian Companies Act, 2013 and hence, the award contravenes Indian Company law and consequently, violates the Fundamental Policy of India. (b) The foreign arbitral award is contrary to the fundamental policy of the Indian Law, as the doctrine of election does not permit the respective petitioners to seek both termination of rights as well as strategic sale under Clause 24.6 read with Clause 19.6 of the SASHA. (c) The respective petitioners having pursued for split sale have waived their rights to pursue the secondary sale. Hence, the foreign arbitral award is contrary to the doctrine of waiver, as the respective petitioners have waived their rights for strategic sale. (d) The foreign arbitral award failed to consider the material issue that the alleged unauthorized obligation/power or the authority must relate to the specific affirmative vote matter listed in annexure 4 of the SASHA. (e) The foreign arbitral award grants relief contrary to the provisions of the Indian Specific Relief Act and hence,....
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....agraph 804(a) are paid, the Claimants will cooperate with the Respondents to surrender all their shares in the first Respondent. The Claimants and Respondents are to co-operate with each other in order to effect such prompt surrender. c. If within 90 days from the date of this Award, the damages in paragraph 804(a) above are not paid, then the Claimants are entitled to proceed towards a Strategic Sale and the Respondents are not to interfere with the Strategic Sale (under Clauses 19.6(b) and 24.6(a) of the SASHA) to be implemented by the Claimants; d. The Respondents are to render full cooperation with respect to any Strategic Sale (under Clause 19.6(b) of the SASHA) to be implemented by the Claimants; 102. To have clarity, this Court deems it fit to point out the difference between "buyback of shares" and "surrender of shares". Only in cases of "buyback of shares", Section 68 of the Indian Companies Act, 2013, gets attracted, whereas it will not get attracted in respect of "surrender of shares". A buyback is a company's active decision to repurchase its own shares from the market to reduce the number of outstanding shares, while a surrender is a shareholde....
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....oked at in any detail. Crucially, the Investors are not required to invoke either or both Clause 19.2 or 19.3 after Clause 19.1 has been invoked, and indeed they cannot do so individually but only in unison and at their option. So to take the simplest argument of all. Assume Clause 19.2 was invoked by all the Claimants and a Buy-Back did not take place, the Claimants would then have a clear right of damages for breach against the Company. The same applies under Clause 19.1 albeit this time against the Promoters and the Company. In other words, there is no true waterfall of rights and obligations which apply to the Investors as a whole when looking for an exit. Under Clause 19.1, the Investors need not act as a collective, but can do so individually and each Investor who triggers Clause 19.1 and requires to be bought out has a secondary right to damages. Moreover, any Investor who does trigger the Clause 19.1 right is not then obliged to proceed under Clause 19.2 if no exit is provided. 372. This does appear to be a further argument in favour of the Claimants' construction. It should be recalled that under Clause 19.6, Clauses 19.2 and 19.3 are referred to in terms "if ....
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....y the Tribunal, then they will undertake to return the shares to the Company, and further that the amount of damages awarded shall be reduced by any amounts recovered from a Strategic Sale and that if the Strategic Sale results in a higher sum being realised than awarded, then the Claimants will not seek to recover those amounts. (d) The decision of the Delhi High Court in the case of NTT Docomo Inc. Vs. Tata Sons Ltd. [2017 SCC Online Del 8078] also premised surrender of shares on payment of damages. The same is reproduced hereunder:- "The award is very clear on this issue. What was awarded to Docomo were damages and not the price of the shares. The order that the share scrips must be returned to Tata was only incidental and, in fact, Docomo itself was not interested in retaining the share scrips." (e) In the same lines, under the foreign arbitral award, the Arbitral Tribunal has directed payment of damages and upon payment of damages, it was made clear that the respective petitioners and other investors shall cooperate with the first respondent company and the promoters to surrender all their shares in the first respondent company. (f) The Arbi....
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.... fallacy of the second and third respondents' argument is borne out from the judgment of the Hon'ble Supreme Court in the case of Renusagar Power Co. Ltd. Vs. General Electrict Co. [1994 Supp (1) SCC 644], where the core allegation was that the enforcement of a foreign arbitral award would amount to a violation of Section 47(3) of the Foreign Exchange Regulation Act, 1973 (FERA), as it involved payment obligations in foreign exchange that had been previously denied approval by the Indian Government. The Hon'ble Supreme Court, while emphasizing on the economic and regulatory objective of FERA, rejected the argument that prior refusal of approval by the Government made subsequent enforcement impermissible, explaining that the Government remains free to re-evaluate its decision based on new developments. Ultimately, the Hon'ble Supreme Court held that none of the grounds raised by Renusagar including those invoking FERA were sufficient to deny enforcement of the arbitral award as there was no violation of a law or public policy. 113. The reliance of the respondents 2 and 3 on Trevor and another Vs. Whitwork and another [1887 (12) App.Cas.409] and Ramesh B. Desai and....
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....wer cooling Solutions India Pvt Ltd [2025 (2) SCC 417], the Hon'ble Supreme Court has held as follows:- "37. What is clear from the above is that for an award to be against public policy of India a mere infraction of the municipal laws of India is not enough. There must be, inter alia, infraction of fundamental policy of Indian law including a law meant to serve public interest or public good." 117. Therefore, it is clear that a breach that is procedural or rectifiable, such as a technical violation of regulatory laws, does not amount to a breach of fundamental policy. Infact, even non-rectifiable breaches have been held to be not in violation of fundamental policy of India. Section 48 of the Act deals with the enforcement of an award, not its validity, and the scope for factual investigation is limited. This distinction underscores the narrow approach to deny enforcement on the basis of public policy and restricts it to violations that are unquestionably contrary to the basic tenets of Indian Law. 118. The reliance of the second and third respondents' on Macdougal vs. Jersey Imperial Hotel Co Ltd [1864 (2) H&M 568] and Barclays Bank Plc Vs. British Commonwea....
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.... "However, the question of the permissibility of the Company buying back the Investors' shares (and whether that might affect the interpretation of cl 19. 1) would not even arise if an order for the Company to pay damages to the Investors (coupled with the Investors returning their shares to the Company upon receipt of such payment) does not "effectively amount" to the Company buying back the Investors' shares to begin with." (c) The Singapore High Court noted that the Arbitral Tribunal also summarized and acknowledged the promoters' objections, particularly in regard to Clause 19.1 of the SASHA and if treated as an absolute obligation, the same would render the buyback provision in Clause 19.2 of the SASHA as redundant. (d) The Singapore High Court held that since the interpretation limb was rejected, the Arbitral Tribunal was not required to separately address the unenforceability limb. (e) The Singapore High Court noted that the promoters' failure to raise the unenforceability limb earlier further weakened their position. 121. Therefore, the Singapore High Court, which is the supervisory court, having rejected the objection with....
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....a); and Trevor (cited supra) by the respondents 2 and 3 to contend that courts have appreciated substance over form is not applicable to the case on hand. For the foregoing reasons, the buyback issue raised by the respondents 2 and 3 once again before the enforcement Court, i.e., this Court, has to be summarily rejected. Doctrine of Election Objections: 125. The second objection raised by the respondents 2 and 3 is that the foreign arbitral award is contrary to the fundamental policy of the Indian Law, since the doctrine of election does not permit the respective petitioners to seek both termination of rights as well as strategic sale under Clause 24.6 read with Clause 19.6 of the SASHA. 126. At the outset, it must be noted that this objection was never raised before the Singapore High Court by the respondents 2 and 3. A proper understanding of this objection reveals that it is, in substance, an impermissible attempt to reopen the merits of the dispute under the guise of a natural justice claim. The contention of the respondents 2 and 3 that the Arbitral Tribunal applied its own reasoning and the principles to conclude that the strategic sale right was validly exercised....
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....hipping Ltd. v. Davof Trading (Africa) BV (The Ocean Glory) [2014] EWHC 3521 (Comm); Cameroon Airlines v. Transnet Limited [2004] EWHC 1829 (Comm); and Vee Networks Limited v. Econet Wireless International Limited [2004] EWHC 2909 (COMM), to contend that the Arbitral Tribunal ought to have provided an opportunity to the parties before deciding an issue that was not before it, is incorrect, misconceived and has to be rejected. 130. The Hon'ble Supreme Court has made it clear in Vijay Karia (cited supra) that the expression "or was otherwise unable to present his case" under Section 48(1)(b) of the Act must be interpreted narrowly. The Hon'ble Supreme Court observed that this standard is considerably more restrictive than the broader tests adopted under the English and Singapore arbitration regimes. Therefore, a mere failure to consider a material issue does not, by itself, fall within the ambit of Section 48(1)(b) of the Act. Further, the Hon'ble Supreme Court in Vijay Karia (cited supra) clarified that violation of Section 48(1)(b) of the Act, which arises only under limited circumstances, such as, where a party is denied the opportunity to meet an argument that goes....
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....bligation) under Clause 24.6(c) of the SASHA. On the same date, the petitioners had also issued a separate notice of strategic sale under Clause 19.6 of the SASHA pursuant to the material breach. In response, the respondents and Mr.Archit Mylandla issued an email dated 11.04.2022 denying the contents of the notice of material breach and notice of strategic sale and they have also stated that the respondents and Mr.Archit Mylandla have "temporarily immediately withdrawn voluntarily" from the first respondent company (Ex.C-3, Emergency arbitration application). The Emergency Arbitral Tribunal, after considering the above response given by the respondents 2 and 3, held that the petitioners have established a prima-facie case that they are contractually entitled to terminate the rights of the respondents 2 and 3 under the SASHA, which includes the second respondent's right to manage the first respondent company under Clause 10.1 of the SASHA. It has further observed that since the respondents 2 and 3 continue to interfere in the operations of the first respondent company, it would be difficult to quantify the impact of such interference to the operations and value of the first resp....
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.... that the respective petitioners have claimed both reliefs, i.e., strategic sale and termination, but, they have not exercised any option to seek termination of the promoters' right at the expense of the right to force a strategic sale, which has been the core relief sought by the respective petitioners in the arbitration. 134. Concurring with the respective petitioners, the Arbitral Tribunal in its Memorandum of Correction and Interpretation of the Final Award dated 22.08.2024 concluded that the rights under Clause 24.6 of the SASHA are disjunctive and that the core relief sought by the respective petitioners is that of a right to implement strategic sale; and that the termination of the rights (and not the obligations) of the respondents cannot be at the expense of the right to force a strategic sale. The respondents 2 and 3 were also reinstated in the management of the first respondent company, post the correction award. 135. It is also to be noted that the ground of election was never raised by the respondents 2 and 3 in their challenge to the award before the Singapore High Court. If the respondents 2 and 3 genuinely believed that the Arbitral Tribunal had failed to ....
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....usly contended that the second respondent was ousted as the Chairman of the Board of Directors of the first respondent company by the petitioners, when infact the Minutes of the Meeting dated 09.02.2024 records to the contrary as under:- "It is a matter of record that Mr.Nagaraj Mylandla, in the past, has chaired the meetings as well and it is also a matter of record that he willingly gave up his position as the Chairman and has requested Mr.Rudhraapathy J to chair." 138. Therefore, it is clear that Mr.Nagaraj Mylandla was never ousted as the Chairman of the Board of Directors by the petitioners, but, had voluntarily given up the chair to Mr.Rudhraapathy J/fourth respondent. For the foregoing reasons, the objections raised by the respondents 2 and 3 that the Arbitral Tribunal did not consider the doctrine of election, which, according to the respondents 2 and 3, is a core issue, has to be rejected by this Court. Waiver Issue: 139. The fourth objection raised by the respondents 2 and 3 for resisting the enforcement of the foreign arbitral award is that the respective petitioners having pursued the split sale have waived their rights for strategic sale. 140. A....
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....d/or position other than as expressly stipulated in this Agreement. 141. The Arbitral Tribunal has comprehensively analyzed and interpreted the terms of the SASHA including the absolute obligation of the respondents 2 and 3 to provide the petitioner an exit under Clauses 19.1 and 29.5 of the SASHA. The Arbitral Tribunal, only after analyzing the contemporaneous correspondence between the respective petitioners and the respondents, has concluded that the respective petitioners had validly invoked their rights under Clause 19.1 and all the parties had agreed to pursue a secondary sale under Clause 19.1 of the SASHA. 142. The respondents 2 and 3 had once again raised this objection of waiver before the Singapore High Court in their challenge made to the award, where it was once again comprehensively dealt with and rightly rejected. Any attempt to reintroduce such objection at the stage of enforcement proceedings under the limited and narrow grounds available under Section 48 of the Act constitutes an impermissible re-litigation of issues already adjudicated by the Arbitral Tribunal as well as by the Singapore High Court. Moreover, the respondents 2 and 3, for the first time, all....
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....t the Singapore High Court agreed that the Tribunal was mistaken in construing that the parties were trying to proceed with a secondary sale when a split sale was being discussed at the said meeting. In the said meeting, under the agenda "Any other business", it was specifically recorded that "the Chairman confirmed that the Company is fully committed to provide 100% exit to the existing investors and will immediately initiate a fund raise process." The Chairman of the said meeting was the second respondent and it is clear that an exit of the Investors was being discussed at the meeting and therefore, it is incorrect for the respondents 2 and 3 to say that the split sale was discussed in the meeting. 146. Following a detailed analysis, the Arbitral Tribunal in paragraph No.413 of the award held as follows:- "413. Further, on 26 March 2021 at a further meeting of the board of the company, the 2nd Respondent confirmed that he was fully committed to providing a 100% exit to the existing shareholders and will immediately initiate a fund raise process. Caution needs to be expressed when crossing a line and relying upon subjective understanding as it is clear that Mannai test....
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.... in a split sale, they had in fact not waived their rights to seek an exit under Clause 19.1 of the SASHA. For the forgoing reasons, the objection raised by the respondents 2 and 3 that the petitioner had waived their rights to pursue a secondary sale by participating in the split sale process, has to necessarily fail. Accordingly, the objection raised by the respondents 2 and 3 with regard to waiver is rejected by this Court. The affirmative vote matter issue: 150. The next objection raised by the respondents 2 and 3 for resisting enforcement of the foreign award is that the Arbitral Tribunal failed to consider the material issue that the unauthorized delegation of power must relate to a specific Affirmative Vote Matter (AVM) listed in annexure IV of the SASHA. 151. The crux of the respondents 2 and 3's argument in this objection is that while holding the respondents 2 and 3 in material breach of Clause 13.4 (Affirmative Voting Matters) read with Clause 24.4(e) (Material Breach of Affirmative Voting Matters) of the SASHA, the Arbitral Tribunal had failed to consider the material issue that the unauthorized delegation of power to Mr.Archit Mylandla must relate to a ....
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....firmative Vote Matter resolution was passed without notice or consent. Instead, the 2nd Respondent appears to have by-passed the SASHA in a material manner by delegating authority for day-to- day management onto Archit who repeatedly carried out this authority in the teeth of express opposition from the Claimants.... [Emphasis supplied] 631. The Tribunal agrees with the Claimants that Clause 13.4(e) of the SASHA does not require the Claimants to first identify the resolution that was passed without the consent of each of the Claimants and thereafter to establish that the resolution or decision was an Affirmative Vote Matter. Not only is such a requirement not expressly stated in Clause 13.4(e), it cannot be the case that any unauthorised action made without the proper approval from the Board is not prohibited under Clause 13.4(e)." 155. Therefore, the Arbitral Tribunal concluded that even if the petitioners had not identified any resolution and that such a resolution was contrary to an Affirmative Vote Matter, there was no requirement to do so under Clause 13.4(e) and an unauthorized action made without proper board approval was also prohibited by Clause 13.4(e) of the ....
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.... this respect and rejected the same, by granting damages in favour of the respective petitioners besides granting strategic sale as a mode to recover the damages. The respondents 2 and 3 have admitted this position at paragraph No.112(3) of their statement of defence before the Arbitral Tribunal. Moreover, SASHA itself contemplated that both reliefs of damages and also strategic sale were available to the petitioners on breach of the respondents 2 and 3's obligation to provide an exit and therefore, the Arbitral Tribunal is within its power to interpret the terms of the SASHA and grant reliefs in furtherance of the same. 159. The relief of damages granted by the award is intrinsically connected to the relief of strategic sale. Grant of such relief does in no way contravene any provisions of the Specific Relief Act. Therefore, the contention of the respondents 2 and 3 that the Tribunal could not have granted damages as a primary relief and specific performance as a secondary relief under Sections 10(b), 14(1)(a) and 21 of the Specific Relief Act is fundamentally flawed, incorrect and has to be rejected. 160. This objection having been already considered and rejected by the....
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....ief Act. Such a contention is incorrect. On review in Siddamsetty (cited supra), the Hon'ble Supreme Court recalled the judgment in Katta Sujhatha Reddy (cited supra) and reinstated the judgment of the High Court, which was impugned therein being Hyderabad Potteries P Ltd. Vs. Debbad Viweswara Rao [2021 SCC Online TS 3590], wherein it was held by the High Court that the 2018 Specific Relief Act would apply retrospectively. The said position of law is also fortified by the Delhi High Court judgment in National Highways Authority of India (NHAI) Vs. HK Toll Road Private Limited [2025 SCC Online Del 2376]. Though an SLP is pending from the decision of the Delhi High Court in NHAI (cited supra), the review order passed by the Hon'ble Supreme Court in Siddamsetty (cited supra) settles the matter, which makes it clear that the provisions of the 2018 Specific Relief Act would apply retrospectively as well. Therefore, the reliance placed by the respondents 2 and 3 in Katta Sujatha Reddy (cited supra) rendered by the Hon'ble Supreme Court is untenable. 163. In view of the above discussion, the submissions of the respondents 2 and 3 with respect to the applicability of the 201....
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....cover the damages awarded. The judgments relied upon by the respondents 2 and 3, namely, Jawahar Lal Wadhva & Ors. v. Haripada Chakroberty AIR 1989 SC 606; Roop Chand Chaudhari v. Ranjit Kumari AIR 1991 P&H 212l; M/s Trans Freight Shipping Services v. N.K. Shashikumar 2018 SCC OnLin Mad 2980 and Kochukunjan Pillai v. Sathiadas 2010 (2) MWN (Civil); Ramchandra Tanwar v. M/s. Ram Rakhmal Amichand 1970 RLW 61; and Divvanshi Saxena v. Shri Ram School ILR (2006) 1 Delhi 447, have no bearing for the facts of the instant case. 167. In addition to the above, the respondents 2 and 3 have also relied on the report of the Expert committee on Specific Relief Act, 1963, to demonstrate the reasons for amendment of the Specific Relief Act. This is of no assistance to the respondents 2 and 3. As stated above, the 2018 Specific Relief Act makes specific performance the norm as opposed to an exception and does away with the requirement of establishing damages as an inadequate remedy to obtain specific performance. For the foregoing reasons, this objection raised by the respondents 2 and 3 as stated supra, has also got to be rejected by this Court. Limitation of liability issue: 168. The ....
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....ad to the investment being unwound." 171. From the above, it is clear that the Arbitral Tribunal had considered the contention of the respondents 2 and 3 and rightly rejected the same. Therefore, there is no non-consideration of an issue, let alone a material issue, as contended by the respondents 2 and 3. This objection seeks a re-interpretation of the SASHA and it is settled law that this ground is not permitted in a petition filed under Section 48 of the Act. Fraud Issue: 172. The last and final objection raised by the respondents 2 and 3 is that the award is vitiated by fraud purportedly committed by the respective petitioners based on the purported concealment of (i) the findings of a report prepared by Ernst & Young dated 15.12.2022 (in short "EY report"); and (ii) certain email correspondences between the employees of the first respondent company where the petitioners are not copied. 173. The respondents 2 and 3 allege that the petitioners concealed the aforesaid documents which allegedly show (a) fraudulent accounting practices in the first respondent company; and (b) the employees of the first respondent company were allegedly manipulating the finance of the fi....
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....act the 2nd Respondent was aware of. d) December 30, 2022 - A meeting of the Board of Directors and Audit Committee of the 1st Respondent was held and the financials for FY 2022 were approved and signed by the 2nd Respondent. The 2nd Respondent was quite clearly himself responsible for confirming the financials of the 1ª Respondent. e) January 30, 2023 - A letter was addressed by the advocates for the Petitioner to the 1st Respondent (copied to the Board of Directors of the 1ª Respondent), informing them of the findings of the EY Report as also the period of review (being April 1, 2020 to March 31, 2022) and requesting the 1st Respondent to take appropriate action. The 2nd Respondent was made aware of the findings of the EY Report by this communication as admitted in the Objections at paragraph 92(d) being "Shocked by the 30 January Letter. I repeatedly sought that a copy of the E&Y Report be shared with me." 1) March 21, 2023 - The Statement of Defence was filed by the Respondents in the SIAC arbitration ("SOD"). However, the Statement of Defence made no mention whatsoever of any purported financial irregularities in the 1st Respondent, let alo....
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.... j) May 31, 2023 - The Tribunal passed an Order adjudicating the disputed requests for documents, including the documents requested by the Respondents, the discovery of which was contested by the Petitioner. While assessing the materiality of such requests, the Tribunal allowed / disallowed such requests. Had the Respondents considered the EY Report to be so material to the arbitration proceedings as they now claim, a simple discovery request for the same ought to have been made. Even assuming the Petitioner had contested such request, the Tribunal had the power to permit discovery, if it was found to be material to the arbitration proceedings. k) March 26, 2023 - The Respondents filed an application seeking vacation of the Order dated June 7, 2022 passed by the Emergency Arbitrator wherein the Respondents referenced the existence and findings of the EY Report and PIOF's letter dated January 30, 2023 as below: "61. An Audit Committee Meeting was held on 30 December 2022 for approval of the accounts. Prior to this meeting, the Claimants Nominee Directors, Rudhraa and Anand were already in possession of the E&Y Report. At this meeting the statutory audit....
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....ert being HKA Global (Singapore) Pte Ltd ("HKA"), who also filed their expert report and the same did not raise a whisper about or question the valuation process/calculation carried out in the Secretariat First Report nor did they allege any financial discrepancies / irregularities in the 1st Respondent or the EY Report. n) November 22-27, 2023 - The evidentiary hearings commenced and were concluded before the SIAC. o) November 23, 2023 - While the evidentiary hearings were proceeding before SIAC, the Respondents opportunistically filed an oppression and mismanagement petition before the National Company Law Tribunal, Chennai being C.P No. 129 of 2023 ("NCLT Petition") inter alia alleging financial irregularities in Respondent No. 1 and seeking an injunction on the appointment of statutory auditors being M/s. G. Sekhar Associates (on grounds of an alleged conflict), inspection of the records of the 1st Respondent and a copy of the EY Report. It is relevant to note that in the NCLT Petition the Respondents emphasize on the findings of the EY Report and state that "..the extremely conspicuous behaviour of Respondent No. 1 around the E&Y Report only supports Petition....
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....t least before the Singapore High Court (which permits fraud as a ground for setting aside of an award), after consciously not doing so during the entire arbitration proceedings. The Respondents knew fully well that such meritless objections would be dismissed by the Singapore High Court at the threshold and knowingly chose to not raise the same. y) February 21, 2025 - The Singapore HC dismissed the proceedings and upheld the Award. Further, the Respondents have been directed to pay costs of USD 25,000 to the Petitioner, Nylim and Millenna. 176. It is clear from the above narration of the dates and events that, a) the Respondents 2 and 3, despite being aware of the existence of the EY Report back in December 2022 and the findings of the EY Report as early as January 30, 2023 i.e., even prior to the filing of their statement of defence, did not allege any impact of purported financial irregularities on the valuation of 1st Respondent/determination of the Exit Price as on September 18, 2020 during the entire course of the arbitration proceedings. b) Both the experts engaged by the Respondents i.e., SHA and HKA, did not question the valuation exercise con....
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....cited supra) was a case filed under Section 34 of the Act. 178. Infact, the respondents 2 and 3 have even failed to demonstrate how an alleged concealment of the EY report has any impact on the passing of the award, particularly, when the review period of the EY report (FY 2020-21 and 2021-22) was not even the subject matter of the analysis before the Tribunal. The respondents 2 and 3 are far from establishing any casual nexus of the EY report to the determination of the exit price by the Arbitral Tribunal. The respondents 2 and 3 have only alleged an inflation of EBITDA in the financials of the first respondent company with no proof, no evidence and no trial whatsoever. The enforcement of the award cannot be resisted on a mere apprehension and speculation, which the respondents are attempting to do. This is not the purport of Section 48 of the Act. 179. The respondents 2 and 3 are barred by law from introducing evidence at this stage, which they could have produced with reasonable diligence during the arbitration. It is settled law in India that enforcement of a foreign award under Section 48 of the Act is not a de novo trial on merits, and the party resisting enforcement ca....
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.... obtained through "corruption or fraud, or undue means". 183. In the instant case, the respondents 2 & 3 have not made out a case for conflict with the basic notions of justice or violation of the substantive public policy of India. This Court also does not find any infirmity with the contractual interpretation given by the Foreign Arbitral Tribunal under the foreign arbitral award as the view taken by the Foreign Arbitral Tribunal is a plausible one. Even assuming that an erroneous interpretation of the contractual terms has been given by the Foreign Arbitral Tribunal, this Court cannot interfere with the same as this Court is only an enforcement Court exercising the limited powers for the purpose of refusing enforcement and if erroneous interpretation of contract by the Foreign Arbitral Tribunal is allowed to be interfered with by this Court, it would amount to impeaching the foreign arbitral award on its merits. 184. The doctrine of transnational issue estoppel is grounded in the principle of finality of litigation. In other words, if a party was able to reopen issues that had already been fully argued and finally dealt with by a court in a later fresh action, this would o....
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....f litigation. In other words, if a party was able to reopen the issues that had already been fully argued and finally dealt with by a court in a later fresh action, this would open the door for an abuse of process. The intention of arbitration is for speedy resolution of disputes. Therefore, the doctrine of transnational issue estoppel can be applied by this Court, which is an enforcement court with regard to the objections that have already been raised by the respondents 2 & 3 before the Singapore High Court and the Singapore High Court had also rejected those objections. 188. The fundamental policy of Indian Law is not a single principle, but a broad concept, particularly, in the context of arbitration, comprising core legal tenets. It signifies violations of principles so basic to Indian law that they are considered non-negotiable rather than just mere errors of law or fact. Courts use this concept to determine if an arbitral award is so perverse or irrational that it shocks the conscious of the court thereby preventing these foundational legal principles. 189. The respondents 2 & 3 have raised objections, which are in the nature of the objections that can be raised only i....
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....t it is not affordable for them to pay the arbitrators' fees, they have not till date expressed their regret for non-payment of the arbitrators' fees and they have also not undertaken that once they are in a position to pay they will reimburse the same to the respective petitioners, who have paid their share of the arbitrators' fees. 192. The respondents 2 & 3 are individuals against whom the arbitral award has been passed, which runs to more 1400 Crores of Indian Rupees. Since the award amount is a huge one and the award has been passed against two individuals, this Court had to give a patient hearing running to several days only to ensure that the respondents 2 & 3's objections were given utmost consideration by this Court in the ends of justice. But, despite giving the utmost consideration for the objections raised by the respondents 2 & 3 resisting the enforcement of the foreign award, this Court has come to the conclusion that the objections raised by the respondent 2 & 3 are untenable objections, which do not deserve any merit. 193. Before parting with this case, this Court recollects the profound words of the Honourable Sandra Day O'Connor, respectable ....
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....hich will not fall under Section 48 of the Act. 195. For the foregoing reasons, the respondents 2 & 3 have not satisfied the requirements of Section 48 of the Act by raising objections, which enables this Court to refuse enforcement of the foreign arbitral award. 196. In the result, (a) The foreign arbitral award dated 05.07.2024 read with the clarification order dated 22.08.2024 passed by the Arbitral Tribunal is declared to be enforceable by this Court against the respondents 2 & 3 as per the provisions of Sections 47 to 49 of the Act. (b) The foreign arbitral award dated 05.07.2024 read with the clarification order dated 22.08.2024 passed by the Arbitral Tribunal in favour of the respective petitioners against the respondents 2 & 3 is deemed to be a decree passed by this Court as per the provisions of Section 49 of the Act. (c) Accordingly, a decree is passed in terms of the foreign arbitral award dated 05.07.2024 read with the clarification order dated 22.08.2024 passed by the Arbitral Tribunal in favour of the respective petitioners against the respondents 2 & 3. (d) Connected interlocutory applications, namely, A.Nos.3748, 3749, 3750,....